Hopes of a grand-bargain — to shave trillions of dollars off the deficit by cutting entitlement programs and raising revenue — are shattered. House Republicans already failed to pass their “Plan B” proposal. And now aides and senators say the White House’s smaller, fall-back plan floated last week is a non-starter among Republicans in Senate — much less the House.

On top of that, the Treasury Department announced Wednesday that the nation would hit the debt limit on Dec. 31, and would then have to take “extraordinary measures” to avoid exhausting the government’s borrowing limit in the New Year.

So how is this going to get done? I see a couple different scenarios.

First, Republicans realize they’re giving Obama a huge political win and pass a stop gap measure to make sure unemployment insurance and tax cuts for those making under $250K don’t expire, while not cutting military spending, etc. Then they can do additional deals down the road.

Second, we wait until after the first of the year…and a new deal is cut. This also gives Obama a political win because now these are the “Obama tax cuts” and the word “Bush” is wiped away.

But the big looming question in all of this is the debt ceiling. Republicans are going to fight tooth and nail to not raise it…and that’s the truly catastrophic situation we’re facing.